China Vanke’s Net Profit Drops by 506% YoY to a Loss of 49.4 Billion Yuan in 2024

On the evening of March 31st, Vanke Group released its 2024 financial report, showing a net loss of 49.4 billion yuan (RMB) in 2024, a decrease of 506% compared to the previous year. At the same time, the company experienced significant declines in several of its core financial indicators.

According to the “2024 Annual Report” released by Vanke on the 31st, the total revenue for 2024 was 343.18 billion yuan, a decrease of 26.3% year-on-year. The net profit attributable to the shareholders of the listed company was a loss of 49.48 billion yuan, down by 506.8% year-on-year.

Vanke attributed the poor performance to both external and internal factors. Significant changes in the supply and demand in the real estate market led to the company’s inability to timely shake off the inertia of high debt, high turnover, and high leverage, resulting in issues such as reckless investments, overly ambitious multi-channel layouts, and delays in transitioning financing models. Moreover, the management and risk control mechanisms failed to keep pace with the needs of business and organizational development, leading to passive operations.

Additionally, the settlement scale and gross profit margin of the development business saw significant decreases, some non-core financial investments incurred losses, and in order to quickly recover funds, the company engaged in asset transactions and equity disposals where the transaction prices were lower than book values.

Vanke stated, “2024 was an exceptionally difficult year for Vanke, facing multiple risks and challenges.” “Due to a significant decrease in sales, resulting in substantial losses and liquidity pressure, we deeply apologize for the trouble caused to shareholders, customers, employees, financial institutions, partners, and those who care about and support Vanke.”

The financial report also revealed that as of the end of 2024, the company’s net debt ratio was 80.6%, an increase of 25.9 percentage points year-on-year. The scale of interest-bearing debts was 361.28 billion yuan, with 158.28 billion yuan of interest-bearing debts maturing within one year, accounting for 43.8%. Meanwhile, Vanke only had 88.16 billion yuan in cash and cash equivalents, insufficient to cover the aforementioned short-term debts. The group will face further liquidity pressures with the concentrated repayment of public debts in 2025.

The announcement also disclosed that Vanke’s executive vice president and COO, Liu Xiaoshen, has applied to resign but remains with the company.

In January 2025, Vanke underwent a major restructuring. The state-owned major shareholder, Shenzhen Metro Group, began to take over Vanke entirely. Founder Yu Liang resigned as chairman of Vanke’s board, replaced by Xin Jie, chairman of Shenzhen Metro Group, while Vanke’s president, Zhu Jiusheng, also resigned. Additionally, key positions such as strategic investment, financial management, legal affairs, and development operations in Beijing, East China, and other core departments were taken over by individuals from the Shenzhen state-owned system.

Regarding Vanke’s substantial losses, netizens expressed their concerns. “Tianya” sighed, “Even the pioneering real estate giants like Vanke are suffering such great losses, opening in the same year as the Shenzhen Stock Exchange in 1991. It might have to exit the securities market.”

“Xianmu” noted, “Relying on new loans to pay off old debts, patching one hole only to open another, collapse is inevitable. Continuously expanding and borrowing, choosing to distribute dividends during profit expansion without reducing debts, it is destined to collapse with no room for turning back.”

Netizen “Xiaohuaide” believed, “Vanke’s debts also reflect the issues in the national real estate sector, which cannot be solved simply by lowering interest rates.”

As of 3:00 PM Beijing time on March 31st, Vanke’s stock price closed at 7.05 yuan per share, down by 0.98%, with a total market value of 841.12 billion yuan.